The CARICOM Chair and Barbados Prime Minister, Mia Mottley, has expressed that in the midst of COVID-19, some small island developing states will successfully re-engineer their economies, while some will collapse thereby having a ripple effect on the nation and world.
Speaking in her address to the 73rd World Health Assembly, Mottley said: “Many countries will either have an orderly restructuring of debt or at the very least a debt moratorium that provides certainty for both the borrower and the lender, or they will have a disorderly unravelling that will create a crisis both within their respective countries and within the global financial markets.”
Mottley explained that this is the reason the region believes that there should be mature and relevant conversations for middle income, small island developing states across the globe especially as it relates to our debt obligations in the midst of this pandemic.
The Barbados PM gave reference to the country she leads, noting: “Barbados took a major leap of faith when we restructured our debt in the last 18 months.”
She indicated that the restructuring included natural disaster clauses in the nation’s domestic and external debt instruments that provide for greater fiscal space to be created through a moratorium on the payment of principal. It also allowed for a capitalization of the interest, should the country face a natural disaster.
Mottley argued the certainty natural disaster clauses provide is increased fiscal space. She continued: “Were this provision available in the context of this pandemic, it would bring tremendous relief to those countries and better position many of us to rebuild in a post-COVID-19 environment.”
She added that the Caribbean’s small states have been suffering from high debt and low growth for decades.
The CARICOM Chair also asserted, that because the Caribbean region’s economies ranks among the most travel and tourism-dependent economies in the world, it has exposed its people and economies in a way that it has not experienced since becoming independent nations more than fifty years ago, in some instances.
Mottley contended that this current crisis calls for global leadership that will allow the region to rebuild its humanity, environment and the equity so badly needed in its societies and economies.
She said that COVID-19 has not only brought people closer together, but it has equally cast a light on the inequities in societies.